Inputs Monitor Regional Index: Nutrient Trails, LP Still Very Bullish

December 30, 2013 03:43 AM

Declines tallied $21.51 to gains' 7 3/4 cents in the regional averages. This last week of December 2013 tells the tale of the year in fertilizer with fertilizer and farm diesel moving lower, and LP marching higher. Cooler temperatures across the nation will hold LP pricing at the high end and now natural gas futures are testing highs of their own. One week ago today, the February 2014 natural gas contract skyrocketed to $4.57. That marks a high not seen since July 2011 which pegs resistance at $4.61. A move above that level would signal upside risk to $5.00.brockensnowedtrees l

Meanwhile, the December 14 corn contract is moving in the other direction and fertilizer prices are following the trend based on the expectation of tepid demand for P&K in the spring, and rumors of continued declines.

Farm diesel is coming around and we are watching downside action unfold as 2013 draws to a close. Indiana farm diesel pricing is below LP pricing in that state, due largely to increases in propane pricing. But Indiana farm diesel now wears a $2 handle. Look for more in today's 'Fuels in Focus' report.

Corn Futures --

Today, the Dec14 corn futures contract (ZCZ14) opened 4 cents higher than our last report at $4.53 1/2. Based on that, expected new-crop revenue lies at $685.60/acre at 160 bu.

The ZCZ/NH3 spread widened 15.63 points on the week and currently lies at -30.81 with Dec 14 corn futures on top. The spread has ranged between $10 and $30 in the last few weeks and at some point, we expect the margin to thin to zero. However, as a barometer of nutrient demand, the corn futures/anhydrous spread is spot on here in the off-season and the longer the fertilizer year drags on, the more demand trails off.

From the corn side, eyes are on the Argentine crop which got a shot of rain over the weekend and kept pressure on U.S. corn futures as a strong South American (S.A.) crop would support the global supply. A robust S.A. crop would also limit price strength for nutrient pricing here in the U.S. and may further trim fertilizer demand for spring if the global supply scene urges growers to switch away from corn acres in 2014.


Regionally --

Anhydrous falls $4.55 to $654.79; UAN28 97 cents lower week-over to $319.75; UAN32 falls $2.38 to $348.06; Urea $1.40 lower to $455.74.

DAP $4.02 lower to $510.18; MAP $6.68 lower to $539.96. Potash falls $1.49 to $474.43.

Farm diesel softens 2 1/4 cent to $3.345 -- 16 cents below year-ago. LP firmed 7 3/4 cents to $2.00 1/4 -- now 56 cents above year-ago.

Week-over Change
Current Week
Farm Diesel
-2 1/4 cents
$1.92 1/2
+ 7 3/4 cents
$2.00 1/4


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